Bad credit mobile phone contracts for people with a poor credit history

I want a mobile phone but I have bad credit – what should I do?

If you have a poor credit history, it can be difficult to find a mobile phone provider who will give you the contract that you want. The better your credit rating, the more likely it is that your application for the phone you want or the package you’d prefer will be approved. 

With a poor credit history you are unlikely to be offered the top-of-the-range phones with the most attractive packages. You might find you have to pay over the odds for a worse package with none of the frills and perks available to others.

But there are mobile phone deals for people with bad credit and there are some sensible steps you can take to make yourself a more attractive mobile phone customer in the future.

You might need to look for an older, cheaper model of phone and accept you will have limited calls and data. If you have a very poor credit history, get an old phone off a friend or buy a refurbished one and get a SIM-only contract for 12 months. 

By paying this off regularly each month, you will improve your chance of getting a better contract next year. Anything else you can do to boost your credit score will help too.

Understand your credit score and how to improve it

Boost your credit rating with the right credit card

Why are mobile phone contracts dependent on credit scores

You will need to go through a credit check if you apply for a pay-monthly mobile phone contact. This is because mobile phone contracts are a form of credit. The company gives you a mobile phone that you have not yet paid for. 

You get to use the phone and run up bills and then pay back the cost of the new phone in instalments over 12 to 24 months, plus your monthly airtime and the data used. 

There is a risk to the phone shop or network provider that you may not keep up with your payments. This risks you keeping a phone you have not fully paid off. You could also run up a massive phone bill or use a large amount of data and not pay for it. 

If you have not paid your previous debts on time, that will worry the mobile phone company that you might do it again. If you have never borrowed or never had any form of credit in the past, the mobile phone company won’t know what level of risk you are, so will assume the worst.

In general, people with better credit ratings can borrow more and at better rates. Because most mobile providers work on a single lending rate, the main influence of your credit score is the total amount they will lend you. To keep the costs down you may need to choose a cheaper model phone and lower data or calls usage and have caps – or bans – on certain costly calls.

Understand how Bad Credit bank accounts work

How can I improve my credit rating to get a better mobile phone contract?  

Your credit rating is based on your previous financial history and includes information about how you have repaid debts such as mortgages, credit cards and loans. But it also covers things like mobile and broadband contracts. If you have failed to pay any other bills, such as electricity or gas, and they were sent to the firm’s recovery team, that bad news will also be added to your credit history, as would any County Court Judgments (CCJs) against you.

If you always repay your credit on time and you are borrowing well within your credit limits, then your score will be high. However, if you miss payments, max out your credit cards, or simply have a lot of outstanding credit commitments, then your score will be lower.

It is worth checking your credit report to make sure it is accurate. Dispute anything that is wrong or missing. You can check your report for free with all three of the main credit scoring agencies, Equifax, Experian and TransUnion.

There are also a set of simple steps you can take to improve your credit score over the coming months and years. These include making sure you are registered on the electoral roll at your address and setting up direct debits to stay on top of all of your outstanding debts to prevent yourself from missing any repayments. You can see our guide to improving your credit rating for more ideas - it can really benefit you in the long run.

Try not to make lots of applications for credit within a short period of time – this can include credit cards, loans or mobile phone contracts – as this can adversely affect your credit score. So do not apply for a mobile phone and a broadband or TV deal or even switch energy providers all at the same time.

Find out more about Basic Bank Accounts